Bitcoin Ends May Down Over 30% but Interest Remains High
- Bitcoin pressured near $36,000, down 36% this month after a turbulent couple of weeks
- Investment institutions expect regulations to enable them to have a piece of the action
Bitcoin Poised to End May Down Over 30%
On the last trading day of May, Bitcoin is looking weak relative to its previous monthly performance. Bitcoin is currently on track to register its first back-to-back losses on a monthly basis since over a year. In April, the world’s biggest digital asset reached its highest-ever point when the price was lifted to $64,800 on April 14. Since then, despite major institutional support and great efforts by retail traders, the crypto token has tumbled. As a result, the buying momentum fizzled out. Bitcoin ended the month of April down 3.4%.
From its peak of nearly $65,000, Bitcoin is now down 44% to current market price of $36,000 on May 31. As the month comes to a close today, the price of the orange coin has slipped 36% month-to-date. This comes amid increasing concerns that the energy-intensive mining process requires a substantial amount of electricity. In addition, Chinese authorities clamped down on crypto mining and trading. This move impacted the confidence of many crypto enthusiasts who retreated until the fears were lifted off the market.
Presently, the total market capitalization has slid to $1.6tn from the peak of $2.5tn a little over two weeks ago. Bitcoin’s market dominance remains near the 42% level, down from 70% in the beginning of the year. In other words, alternative coins hold a market share of slightly over $900bn.
Institutional Interest in Bitcoin
As the market moves into June, institutional interest in taking a piece of the action remains high. Many of the largest investment banks in the US are facing increasing pressure from clients to enable Bitcoin trading and investing. And many of the banking firms are eager to allow cryptocurrency trading. That is, provided there is an overarching regulatory framework that will protect investors from the inherent risks in the cryptocurrency market.
In corporate news, Goldman Sachs, a top US investment bank, last week became the first major investment firm to define Bitcoin as “an investable asset” and the entire cryptocurrency market as “a new asset class”.
Even after the turbulent and challenging period in May, funds like BlackRock, the largest asset manager in the world with over $9tn in assets, continue to keep an eye on the Bitcoin developments. Meanwhile, financial companies around the world await regulations that would allow traditional investors to jump into the emerging market.
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